Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized I. Basic Information Date prepared/updated: 01/04/2008 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Report No.: AC3198 1. Basic Project Data Country: Maldives Project ID: P107981 Project Name: Maldives Mobile Phone Banking Project Task Team Leader: Sriyani M. Hulugalle Estimated Appraisal Date: December 3, Estimated Board Date: April 10, 2008 2007 Managing Unit: SASFP Lending Instrument: Specific Investment Loan Sector: Payment systems, securities clearance and settlement (90%);Banking (10%) Theme: Other financial and private sector development (P) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 7.70 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 1.35 Consultative Group to Assist the Poorest 1.50 Financing Gap 0.00 2.85 Environmental Category: C - Not Required Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) Yes [ ] No [] 2. Project Objectives The objective of the project is to significantly increase the use of banking system transactions for effecting or receiving payments for labor, goods and services nationwide through the implementation of a national inter-operable payments system that facilitates access to financial services and allows users access to any bank account using any mobile phone operator and cashing through any agent. 3. Project Description The project has two main components: Component 1 - The creation, establishment and operationalization of the Maldives Interoperable Payments System (MIPS) : (US$ 6.00 million). The payment system is a single currency system operating in Maldivian Rufiyaas (MRF) that will be capable of interoperating with all local mobile network operators and integrating all the banks. The system will offer a set of mobile telephone based accounts that include: (i) Mobile payment accounts, (ii) Mobile agent accounts, (ii) Mobile card accounts, (iii) Mobile
loyalty, (iv) Mobile airtime reseller accounts, and (iv) a Customized account type - for introduction of new banking/payment products in future. The payment system will enable subscribers to transfer funds to and from bank accounts held in any bank to and from the telephone based accounts. The telephone accounts will be accessible from the handset. New customers will be able to enroll through the mobile handset and withdrawal and deposit functions will be performed by a network of agents. The project aims at having at least one agent in each of the 200 inhabited islands, 100 resorts, 30-40 industrial/agricultural islands, and in Male. Each agent will have a direct contractual relationship with the bank for which he/she performs cash functions. For the purpose of supporting the Know Your Customer qualification the system will be integrated with the National Registration System for validation of subscriber identity during the enrolment process. Component 2 - Building capacity so that the interoperable payments system can work well; designing and implementing a legal and regulatory framework and supporting a promotion/public education campaign (US$ 1.00 Million) Capacity must be built in several ways to ensure that the system is properly regulated, works for clients and is well managed. It will be necessary to develop and implement regulations to cover all aspects of the system as well as build the capacity of regulators to supervise the system. To help ensure that people and businesses understand the benefits of the system and adopt and trust it, a promotion/ public education campaign will be conducted. Finally, a mobile phone banking unit will be established under the MMA that has the capability to implement MIPS. At the same time, this unit will be established keeping in mind the longer term objective of transitioning into a competent, viable MIPS Business Unit after transaction volumes reach a reasonable level. CGAP will provide parallel funding to cover the costs of: (i) specialized external technical expertise required to design and implement the system including employing a Technical Advisor who will report to the MMA and assist the Project Director to lead and manage the development of the project from the beginning as well as put in place the system and the team for the MIPS Business Unit; (ii) developing a road map for all the legal and regulatory work that is to be done and drafting the framework regulation; and (iii) assist in conducting market research and impact studies. 4. Project Location and salient physical characteristics relevant to the safeguard analysis Existing inhabited islands of chosen atolls of the Maldives. 5. Environmental and Social Safeguards Specialists Mr Sumith Pilapitiya (SASDN)
6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Considering the scope and activities financed under this project, there would be no adverse environmental impacts arising as a result of direct or indirect project activities. There will be no construction of buildings or any other form of civil works undertaken from the proceeds of this project. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Not applicable. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. An alternative analysis is not applicable since the project will not result in any adverse environmental or social impacts. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The Republic of Maldives has very stringent environmental laws which are enforced strictly as the country s economy is dependent on tourism which is directly tied to the country s pristine ecology. However, this project would not result in any adverse environmental impacts due to the nature and the scope of the project and activities financed under the project. There will be no construction of buildings or any other form of civil works undertaken from the proceeds of this project. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. There are no safeguard policies triggered as a result of activities to be financed under this project. Therefore, there has been no consultation of stakeholders with regard to safeguard issues.
B. Disclosure Requirements Date * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: This is a Category C project with no adverse environmental and social impacts. No safeguard policies have been triggered. Therefore, no environmental or social safeguards assessments have been conducted. C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank s Infoshop? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? No D. Approvals Signed and submitted by: Name Date Task Team Leader: Ms Sriyani M. Hulugalle 01/03/2008 Environmental Specialist: Mr Sumith Pilapitiya 01/04/2008 Social Development Specialist Mr Fabio Pittaluga 01/04/2008 Additional Environmental and/or Social Development Specialist(s): Approved by: Sector Manager: Mr Simon C. Bell 01/03/2008 Comments: